Nivrutti Murlidhar Lute, Ahmednagar V. Income-tax Officer (TRO),

ITA 403/PUN/2014

• Counselvise Citation: [2017] 126 COUNSELVISE.COM (IT) 7370 (ITAT-PUNE)
• Duration Of Justice: 3 year(s) 7 month(s) 3 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 06-10-2017
• Appeal Filed By: Assessee
• Order Result: Partly Allowed
• Bench Allotted: B
• Next Hearing Date: 05-10-2017
• Assessment Year: 2005-2006
• Appeal Filed On: 03-03-2014
• Result in Favour of: Partly Allowed
• Court: TRIBUNAL
• Department Lawyers: SUMITRA BANERJI
• Keywords: Presumptive income
• Section: 148; 28; 144

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL B BENCH, PUNE , , , BEFORE SHRI ANIL CHATURVEDI, AM AND SHRI VIKAS AWASTHY, JM . / ITA NO . 403 /PUN/201 4 / ASSESSMENT YEAR : 20 05 - 06 NIVRUTTI MURLIDHAR LUTE, AT & POST: RAHATA, TAL: RAHATA, AHMEDNAGAR 423107 PAN : ABXPL1775F ....... / APPELLANT / V S. TAX RECOVERY OFFICER (IT), AHMEDNAGAR / RESPONDENT ASSESSEE BY : SHRI BHARAT SHAH REVENUE BY : MS. SUMITRA BANERJI / DATE OF HEARING : 05 - 10 - 2017 / DATE OF PRONOUNCEMENT : 06 - 10 - 2017 / ORDER PER VIKAS AWASTHY, JM : TH IS APPEAL BY THE ASSESSEE IS DIRECTED AGAINST THE ORDER OF COMMISSIONER OF INCOME TAX (APPEALS) - IT/TP, PUNE DATED 21 - 01 - 2014 FOR THE ASSESSMENT YEAR 2005 - 06. 2. IN APPEAL, THE ASSESSEE HAS ASSAILED THE FINDINGS OF COMMISSIONER OF INCOME TAX (APPEALS) IN CONFIRMING ADDITION OF 2 ITA NO . 403/PUN/2014, A.Y. 2005 - 06 RS.10,23,500/ - U/S. 69A O F THE INCOME TAX ACT, 1961 (HEREINAFTER REFERRED TO AS THE ACT ). 3. SHRI BHARAT SHAH APPEARING ON BEHALF OF ASSESSEE SUBMITTED THAT THE ASSESSEE IS ENGAGED IN SUPPLYING WATER THROUGH TANKERS. THE ASSESSEE OWNS TWO WATER TANKERS THROUGH WHICH HE IS SUPPLYING WATER . WHEN THERE IS EXCESS DEMAND FOR WATER , THE ASSESSEE HIRES WATER TANKERS FROM THIRD PARTIES FOR SUPPLYING WATER. THE ASSESSEE IS NOT MAINTAINING ANY BOOKS OF ACCOUNT AND HAS RETURNED INCOME FOR THE IMPUGNED ASSESSMENT YEAR ON THE BASIS OF SECTION 44AE OF THE ACT. APART FROM INCOME EARNED THROUGH SUPPLY OF WATER, THE ASSESSEE HAS AGRICULTURAL LAND AND IN THE RETURN OF INCOME THE ASSESSEE HAS DISCLOSED AGRICULTURAL INCOME AS WELL. IN THE RETURN OF INCOME FOR THE ASSESSMENT YEAR 2005 - 06 FIL ED ON 10 - 05 - 2006 THE ASSESSEE HAS DECLARED TOTAL INCOME FROM SUPPLY OF WATER RS.84,000/ - AND AGRICULTURAL INCOME OF RS.25,000/ - . ON THE BASIS OF AIR INFORMATION , ASSESSMENT WAS REOPENED AND NOTICE U/S. 148 WAS ISSUED TO THE ASSESSEE ON 24 - 03 - 2011. AS PER INFORMATION RECEIVED THERE WAS CASH DEPOSITS OF RS.10,23,500/ - IN THE SAVING BANK ACCOUNT OF THE ASSESSEE MAINTAINED WITH UNION BANK OF INDIA. THE LD. AR PLACED ON RECORD PHOTOCOPY OF THE BANK PASSBOOK. THE LD. AR CONTENDED THAT THE SAID AMOUNT DEPOSITE D IS IN RESPECT OF CASH RECEIVED ON ACCOUNT OF SUPPLY OF WATER. THE ASSESSEE HAS MADE CHEQUE PAYMENTS TO THE PERSONS FROM WHOM THE ASSESSEE HAD HIRED TANKERS FOR SUPPLY OF WATER DURING PEAK SEASON. THE LD. AR FURTHER SUBMITTED THAT ONCE THE ASSESSEE HAS FILED RETURN OF INCOME AFTER COMPUTING INCOME UNDER THE PROVISIONS OF SECTION 44AE THE ASSESSEE IS NOT REQUIRED TO EXPLAIN INDIVIDUAL ENTRY OF THE CASH DEPOSITS IN THE BANK. IN SUPPORT OF HIS SUBMISSIONS, THE LD. 3 ITA NO . 403/PUN/2014, A.Y. 2005 - 06 AR PLACED RELIANCE ON THE DECISION OF HON BLE PUNJAB AND HARYANA HIGH COURT IN THE CASE OF COMMISSIONER OF INCOME TAX VS. SURINDER PAL ANAND IN ITA NO. 156 OF 2010 DECIDED ON 20 - 06 - 2010. 4. ON THE OTHER HAND MS. SUMITRA BANERJI REPRESENTING THE DEPARTMENT VEHEMENTLY DEFENDED THE IMPUGNED ORDER. THE LD. DR SUBMITTED THAT A PERUSAL OF DOCUMENTS ON RECORD REVEAL THAT THE ASSESSEE THROUGHOUT WAS NON - COOPERATIVE. THE ASSESSEE NEVER APPEARED BEFORE THE ASSESSING OFFICER DESPITE BEING GIVEN SEVERAL OPPORTUNITIES BY ASSESSING OFFICER. THE ASSESSING O FFICER WAS CONSTRAINED TO PASS ASSESSMENT ORDER BY INVOKING THE PROVISIONS OF SECTION 144 OF THE ACT. THEREAFTER, BEFORE FIRST APPELLATE AUTHORITY THE ASSESSEE NEVER APPEARED TO PURSUE HIS APPEAL. THE ASSESSEE ONLY FILED WRITTEN SUBMISSIONS. THE COMMISS IONER OF INCOME TAX (APPEALS) DECIDED THE ISSUE ON THE BASIS OF MATERIAL AVAILABLE ON RECORD AND WRITTEN SUBMISSIONS FILED BY ASSESSEE. MERE OWNERSHIP OF WATER TANKERS AND OWNING AGRICULTURAL LAND DOES NOT ABSOLVE THE ASSESSEE FROM EXPLAINING THE SOURCE O F CASH CREDIT IN THE BANK ACCOUNT. 5. W E HAVE HEARD THE SUBMISSIONS MADE BY THE REPRESENTATIVES OF RIVAL SIDES AND HAVE PERUSED THE ORDERS OF THE AUTHORITIES BELOW . IT IS ASSESSEES OWN ADMISSION THAT THE ASSESSEE IS SUPPLYING WATER THROUGH HIS OWN TAN KERS , AS WELL AS BY HIRING WATER TANKERS FROM THIRD PARTIES. THE ASSESSEE HAS COMPUTED HIS INCOME FOR THE IMPUGNED ASSESSMENT YEAR UNDER THE PROVISIONS OF SECTION 44AE OF THE ACT. THE RELEVANT EXTRACT OF SECTION 44AE AS WAS APPLICABLE IN ASSESSMENT YEAR 2005 - 06 IS REPRODUCED HERE - IN - BELOW : 44AE. (1) NOTWITHSTANDING ANYTHING TO THE CONTRARY CONTAINED IN SECTIONS 28 TO 43C, IN THE CASE OF AN ASSESSEE, WHO OWNS NOT MORE THAN 4 ITA NO . 403/PUN/2014, A.Y. 2005 - 06 TEN GOODS CARRIAGES [AT ANY TIME DURING THE PREVIOUS YEAR] AND WHO IS ENGAGED IN THE BUSINESS OF PLYING, HIRING OR LEASING SUCH GOODS CARRIAGES, THE INCOME OF SUCH BUSINESS CHARGEABLE TO TAX UNDER THE HEAD PROFITS AND GAINS OF BUSINESS OR PROFESSION SHALL BE DEEMED TO BE THE AGGREGATE OF THE PROFITS AND GAINS, FROM ALL THE GOODS CARR IAGES OWNED BY HIM IN THE PREVIOUS YEAR, COMPUTED IN ACCORDANCE WITH THE PROVISIONS OF SUB - SECTION (2). (2) FOR THE PURPOSES OF SUB - SECTION (1), THE PROFITS AND GAINS FROM EACH GOODS CARRIAGE, (I) BEING A HEAVY GOODS VEHICLE, SHALL BE AN AMOUNT EQUAL TO [THREE THOUSAND FIVE HUNDRED] RUPEES FOR EVERY MONTH OR PART OF A MONTH DURING WHICH THE HEAVY GOODS VEHICLE IS OWNED BY THE ASSESSEE IN THE PREVIOUS YEAR OR, AS THE CASE MAY BE, AN AMOUNT HIGHER THAN THE AFORESAID AMOUNT AS DECLARED BY HIM IN HIS RETUR N OF INCOME; (II) OTHER THAN A HEAVY GOODS VEHICLE, SHALL BE AN AMOUNT EQUAL TO [THREE THOUSAND ONE HUNDRED AND FIFTY] RUPEES FOR EVERY MONTH OR PART OF A MONTH DURING WHICH THE GOODS CARRIAGE IS OWNED BY THE ASSESSEE IN THE PREVIOUS YEAR OR, AS THE CASE MAY BE, AN AMOUNT HIGHER THAN THE AFORESAID AMOUNT AS DECLARED BY HIM IN HIS RETURN OF INCOME. (3) ANY DEDUCTION ALLOWABLE UNDER THE PROVISIONS OF SECTIONS 30 TO 38 SHALL, FOR THE PURPOSES OF SUB - SECTION (1), BE DEEMED TO HAVE BEEN ALREADY GIVEN FULL EFF ECT TO AND NO FURTHER DEDUCTION UNDER THOSE SECTIONS SHALL BE ALLOWED : THE ASSESSEE IN HIS RETURN OF INCOME HAS DECLARED INCOME OF RS.84,000/ - BY APPLYING THE AFORESAID PROVISIONS OF SECTION 44AE(2)(I) OF THE ACT IN RESPECT OF TWO TANKERS OWNED BY HIM. IN SO FAR AS INCOME EARNED BY ASSESSEE FROM HIRING OF TANKERS IS CONCERNED , NO INCOME HAS BEEN SHOWN IN THE RETURN OF INCOME. 6. IT IS AN UNDISPUTED FACT THAT THERE ARE CASH CREDITS TO THE TUNE OF RS.10,23,500/ - IN THE SAVING BANK ACCOUNT OF THE ASSES SEE. THE ASSESSEE HAS ADMITTED THE FACT THAT THE AFORESAID CASH DEPOSITS ARE ON ACCOUNT OF SUPPLY OF WATER. A PERUSAL OF THE BANK STATEMENT SHOWS THAT THE ASSESSEE HAS MADE PAYMENTS THROUGH CHEQUE S TO VARIOUS PARTIES PURPORTEDLY FOR HIRING OF TANKERS TO MEET THE ADDITIONAL SUPPLY 5 ITA NO . 403/PUN/2014, A.Y. 2005 - 06 OF WATER. THUS, THE ENTIRE AMOUNT OF DEPOSITS CANNOT BE CONSIDERED AS INCOME OF THE ASSESSEE. TAKING INTO CONSIDERATION TOTALITY OF FACTS, WE ARE OF CONSIDERED VIEW THAT PRESUMPTIVE INCOME IN RESPECT OF SUPPLY OF WATER THROUGH HIRED TANKERS ESTIMATED AT 8% OF CASH CREDITS FOUND IN BANK ACCOUNT WOULD MEET THE ENDS OF JUSTICE. IN VIEW OF OUR ABOVE FINDINGS, THE APPEAL OF ASSESSEE IS PARTLY ALLOWED IN THE AFORESAID TERMS. 7. IN THE RESULT, THE APPEAL OF ASSESSEE IS PARTLY ALLOWED . ORDER PRONOUNCED ON FRIDAY, THE 06 TH DAY OF OCTOBER, 201 7 . SD/ - SD/ - ( / ANIL CHATURVEDI ) ( / VIKAS AWASTHY) / ACCOUNTANT MEMBER / JUDICIAL MEMBER / PUNE; / DATED : 06 TH OCTOBER, 2017 RK / COPY OF THE ORDER FORWARDED TO : 1. / THE APPELLANT. 2. / THE RESPONDENT. 3. ( ) / THE CIT(A) - IT/TP, PUNE 4. / THE CIT - I, PUNE 5. , , , / DR, ITAT, B BENCH, PUNE. 6. / GUARD FILE. // // TRUE COPY// / BY ORDER, / PRIVATE SECRETARY, , / ITAT, PUNE